Laura Slattery: Elon Musk not the only social media boss winging it on the cusp of recession

With the air of a substitute teacher who has lost control of the class and responds by locating his inner despot, Elon Musk has started his second full week in nominal charge of Twitter by permanently suspending the many accounts that had taken to impersonating him, among them that of Mad Men actor Rich Sommer.

“I’m in over my head. Can 44 billion of you send $1 each to Twitter, attn me?” was one of the tweets @richsommer sent under Musk’s username and picture.

Clearly, this satire was too close to reality to be distinguishable from it, so the guy who played Harry Crane in all seven seasons of Mad Men had to go.

Sommer’s Crane, for those who missed the 1960s-set advertising agency drama, was an underpaid and ignored beta male who nevertheless showed vision by forming Sterling Cooper’s television department.

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The character believed in two things that present a major challenge to Twitter today: content moderation — he arranged for the scripts of TV shows to be vetted before he bought advertising during them — and schmoozing clients. Harry Crane was the guy who knew what he was doing but never got the credit he deserved. He was not anyone’s hero.

In real life, we encounter the converse scenario: ultra-successful people who we assume must know what they’re doing, even when they do and say stupid things. Otherwise, they wouldn’t be ultra-successful, right?

Despite telling our brains not to do this — and despite all the lessons we should have learned from our experience of market crashes, financial crises and 21st-century politics — we discount the role of luck, timing and pre-existing capital in previous success. We can’t help being surprised when someone who displays flashes of genius in one field appears to be a fool in another.

When Musk threatens the advertisers, from whom Twitter gets more than 90% of its revenue, some people begin to wonder if he is actually trying to burn that $44bn he overpaid for Twitter

We convince ourselves that individual men would not be able to rise to positions of immense power and wealth if they didn’t reside on some plane of brilliance too high for us mere mortals to see. They must, at least, be special.

So when Musk threatens the advertisers, from whom Twitter gets more than 90 per cent of its revenue, some people begin to wonder if he is actually trying to burn that $44 billion (€44 billion) he overpaid for Twitter as fast as possible — like, on purpose.

Neutral Musk-watchers contemplate the idea there must be a secret, fiendishly clever explanation for such bizarre behaviour as running a Twitter poll on whether advertisers should support “freedom of speech” or “political ‘correctness’” — a false dichotomy that advertisers simply don’t recognise.

There is an urge to search for methods in the madness of Twitter’s new owner, the self-described Chief Twit, when he announces that it has done “everything we could to appease the activists” who have called on advertisers to pause their activity on the platform.

Surely Elon “I hate advertising” Musk can’t be so jaded and defeatist after just a week. (He is). Surely he can’t be daft enough to block Lou Paskalis, the president of the Mobile Marketing Association, after he restated advertisers’ fears about the impact of Twitter’s mass layoffs on brand safety. (He is.) Surely he isn’t short-sighted enough to sack employees on Friday that he needs the following Monday. (He is.)

Musk must be aware that the gleeful privileging of paid users under his new $8-a-month subscription regime could prompt an exodus of disgruntled non-paying users, shrinking the total audience Twitter has to sell to advertisers.

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He must have weighed up the security considerations of abandoning the old verification process — the point the impersonators were making — or the risk that a company that lets go half its staff leaves itself more vulnerable to existential technical disasters. He must know it is Twitter that needs advertisers, not the other way around.

He couldn’t be silly enough to rant about “a thermonuclear name and shame” of the major advertisers now avoiding Twitter, even though several of them — General Motors, Mondelez International, Pfizer, Volkswagen — have happily put their decision in the public domain.

Well, it seems he is. Like a spoiled child who can’t stand to see anybody else play with a coveted toy, Musk has seized control of Twitter and is now proceeding to smash it into tiny pieces.

But here’s the thing: that toy was liable to break anyway.

The story of social media success, from a rarely profitable minnow like Twitter to a revenue-sucking supergiant like Meta, has always had some holes in it.

Ad revenues at Twitter — now undergoing a “massive drop”, according to Musk — were in decline before he completed his takeover, and while uncertainty about its ownership has contributed to this lacklustre performance, so too has impending economic misery. From day one, social media companies have been hugely exposed to recessions. Their newness masked this fact during the last downturn. It won’t this time.

That Meta has more than 87,000 employees compared to the 7,000 Twitter had before last Friday’s redundancies is one measure of just how much bigger a beast it is

Another conundrum they have collectively failed to solve is how to pay for the level of content moderation necessary to stop their platforms from becoming toxic hellscapes, while still making enough money to satiate their shareholders. Neither has any social media company properly figured out how to protect itself from the next big thing (cough, TikTok) or adapt their business to comply with privacy concerns.

That Meta has more than 87,000 employees compared to the 7,000 Twitter had before last Friday’s redundancies is one measure of just how much bigger a beast it is.

Facebook’s hard sell to advertisers, its early mover advantage, its smart pick of top executives and its all-time bargain $1 billion purchase of Instagram ensured it thrived financially even when some users, some advertisers and some governments grew disillusioned.

It would be wrong to say founder and chief executive Mark Zuckerberg never knew what he was doing. Indeed, his recent faffing about with the metaverse shows he realised faster than most that social media won’t forever remain an engine of growth.

But no one would say that the Meta of today — its revenue now in decline for two consecutive quarters — is anywhere near as sure-footed as the Facebook of yesteryear, even if it has just worked out how to give its metaverse avatars legs. Now poised for layoffs of its own, its wobbles are likely to be even more painful than Twitter’s and almost as difficult to recover from.